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8-K - FORM 8-K - ENNIS, INC.d371504d8k.htm

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

ENNIS, INC. REPORTS RESULTS

FOR THE FIRST QUARTER ENDED MAY 31, 2012

Midlothian, June 25, 2012 — Ennis, Inc. (the “Company”), (NYSE: EBF), today reported financial results for the first quarter ended May 31, 2012.

Financial Overview

Our consolidated net sales were $142.5 million for the quarter ended May 31, 2012 compared to $143.3 million for the quarter ended May 31, 2011. Print sales for the current quarter were $87.3 million, compared to $67.1 million for the same quarter last year, or an increase of 30.1%. Apparel sales for the current quarter were $55.2 million, compared to $76.1 million for the same quarter last year, or a decrease of 27.5%. Overall our gross profit margins (“margins”) decreased from 27.7% to 19.8% for the quarters ended May 31, 2011 and May 31, 2012, respectively. Our print margin decreased slightly from 28.8% to 27.9%, due to the lower margins of our recent acquisitions. Our apparel margin, which continues to be impacted by the higher yarn costs flowing through its cost of sales, decreased from 26.8% to 7.0% for the quarter. As a result, our net earnings decreased from $11.4 million, or 8.0% of sales, for the quarter ended May 31, 2011 to $3.9 million, or 2.7% of sales, for the quarter ended May 31, 2012. Diluted EPS decreased from $0.44 per share to $0.15 per share for the quarters ended May 31, 2011 and May 31, 2012, respectively.

During the quarter, the Company generated $10.0 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to $21.9 million for the comparable quarter last year.

Reconciliation of Non-GAAP to GAAP measure (dollars in thousands):

 

     Three months ended
May 31,
 
     2012      2011  

Earnings before income taxes

   $ 6,108       $ 17,850   

Interest expense

     469         818   

Depreciation/amortization

     3,441         3,199   
  

 

 

    

 

 

 

EBITDA (non-GAAP)

   $ 10,018       $ 21,867   
  

 

 

    

 

 

 

Keith Walters, Chairman, Chief Executive Officer and President, commented by saying, “Our print operations continued to deliver revenue and operational results as expected. The two new


acquisitions (Printegra and PrintXcel) delivered sales of $19.6 million for the quarter, which was slightly higher than expected, and operational profits of $.8 million, which was less than expected due to some duplicate transitional costs and some operational inefficiency, which we expect to have corrected over the next several quarters. Our apparel results, as expected, continue to be negatively impacted by higher raw material costs flowing into cost of sales. This negative impact will gradually abate over the next quarter or two as the higher cost items, which have been in our finished goods inventory and flowing into our cost of sales, are replaced with items manufactured with significantly lower raw material costs. The apparel market continues to be somewhat constrained, from a volume perspective, and pricing in the marketplace continues to be highly competitive. While the apparel sector continues to be somewhat challenged, we feel good about the long-term prospects of both sectors. As always, no matter what direction this fiscal year takes, you can be assured we will remain vigilant to the task at hand.”

About Ennis

Ennis, Inc. (www.ennis.com) is primarily engaged in the production of and sale of business forms, apparel and other business products. The Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, the Company has production and distribution facilities strategically located throughout the United States of America, Mexico and Canada, to serve the Company’s national network of distributors. The Company, together with its subsidiaries, operates in two business segments: the Print Segment (“Print”) and Apparel Segment (“Apparel”). The Print Segment is primarily engaged in the business of manufacturing and selling business forms, other printed business products, printed and electronic media, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, envelopes and other custom products. The Apparel Segment manufactures T-Shirts and distributes T-Shirts and other active-wear apparel through nine distribution centers located throughout North America.

Safe Harbor Under The Private Securities Litigation Reform Act of 1995

Certain statements contained in this press release that are not historical facts are forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The words “anticipate,” “preliminary,” “expect,” “believe,” “intend” and similar expressions identify forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These statements are subject to numerous uncertainties, which include, but are not limited to, the Company’s ability to effectively manage its business functions while growing its business in a rapidly changing environment, the Company’s ability to adapt and expand its services in such an environment, the variability in the prices of paper and other raw materials. Other important information regarding factors that may affect the Company’s future performance is included in the public reports that the Company files with the Securities and Exchange Commission. The Company undertakes no obligation to revise any forward-looking statements or to update them to reflect events or circumstances occurring after the date of this release, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.


For Further Information Contact:

Mr. Keith S. Walters, Chairman, Chief Executive Officer and President

Mr. Richard L. Travis, Jr., Chief Financial Officer

Mr. Michael D. Magill, Executive Vice President

Ennis, Inc.

2441 Presidential Parkway

Midlothian, Texas 76065

Phone: (972) 775-9801

Fax: (972) 775-9820

www.ennis.com


Ennis, Inc.

Condensed Financial Information

(In thousands, except per share amounts)

 

     Three months ended
May 31,
 

Condensed Operating Results

   2012     2011  

Revenues

   $ 142,528      $ 143,258   

Cost of goods sold

     114,279        103,557   
  

 

 

   

 

 

 

Gross profit margin

     28,249        39,701   

Operating expenses

     22,022        20,857   
  

 

 

   

 

 

 

Operating income

     6,227        18,844   

Other expense

     119        994   
  

 

 

   

 

 

 

Earnings before income taxes

     6,108        17,850   

Income tax expense

     2,229        6,426   
  

 

 

   

 

 

 

Net earnings

   $ 3,879      $ 11,424   
  

 

 

   

 

 

 

Earnings per share

            

Basic

   $ 0.15      $ 0.44   
  

 

 

   

 

 

 

Diluted

   $ 0.15      $ 0.44   
  

 

 

   

 

 

 

Condensed Balance Sheet Information

   May 31,
2012
    February 29,
2012
 
Assets   

Current assets

    

Cash

   $ 14,967      $ 10,410   

Accounts receivable, net

     58,681        58,790   

Inventories, net

     117,372        132,572   

Other

     15,130        17,438   
  

 

 

   

 

 

 
     206,150        219,210   
  

 

 

   

 

 

 

Property, plant & equipment

     94,826        99,516   

Other

     211,905        213,236   
  

 

 

   

 

 

 
   $ 512,881      $ 531,962   
  

 

 

   

 

 

 
Liabilities and Shareholders’ Equity   

Current liabilities

    

Accounts payable

   $ 19,605      $ 27,924   

Accrued expenses

     19,933        22,317   
  

 

 

   

 

 

 
     39,538        50,241   
  

 

 

   

 

 

 

Long-term debt

     85,000        90,000   

Other non-current liabilities

     30,941        31,846   
  

 

 

   

 

 

 

Total liabilities

     155,479        172,087   
  

 

 

   

 

 

 

Shareholders’ equity

     357,402        359,875   
  

 

 

   

 

 

 
   $ 512,881      $ 531,962   
  

 

 

   

 

 

 
     Three months ended
May 31,
 

Condensed Cash Flow Information

   2012     2011  

Cash provided by operating activities

   $ 14,766      $ 11,271   

Cash used in investing activities

     (126     (2,117

Cash used in financing activities

     (9,561     (3,869

Effect of exchange rates on cash

     (522     263   
  

 

 

   

 

 

 

Change in cash

     4,557        5,548   

Cash at beginning of period

     10,410        12,305   
  

 

 

   

 

 

 

Cash at end of period

   $ 14,967      $ 17,853